Armenian News...A Topalian... Disbanded Parliament

ArmenPress.am

“We will have a disbanded parliament November 1” – Pashinyan says, steering toward snap polls

27 October 2018

Acting Prime Minister of Armenia Nikol Pashinyan doesn’t rule out getting nominated in the second round of election of a prime minister also.

“On November 1 we will have a disbanded parliament, but we will see through what scenario”, Pashinyan told reporters today.

“Due to considerations to address the current economic situation and development strategy, as well as other political considerations, I don’t rule out that I will be nominated as candidate for prime minister,” Pashinyan said, adding that during the previous debates he didn’t manage to speak about everything he wanted to, namely about the economy.

On October 24, the Armenian parliament got one step closer to being disbanded as it voted down Nikol Pashinyan’s candidacy as a formality in the first round of electing a prime minister.

No one voted in favor, 1 MP voted against, and 11 lawmakers abstained.

53 votes are required to elect a prime minister.

The Yelk faction nominated incumbent acting Prime Minister Nikol Pashinyan’s candidacy as a formality in a pre-arranged scenario of not being elected in order to trigger the process of dissolution of parliament.

Pashinyan tendered a technical resignation on October 16 in order to launch the process of calling early elections.

According to the Constitution, if a prime minister resigns lawmakers must elect a new PM within two weeks. If MPs fail to elect a PM during the first vote, a second round takes place a week later. If the second round also fails to elect a prime minister, the parliament is dissolved by virtue of law and the president calls early elections.

Prior to the vote, parliamentary factions must nominate candidates for the election. All factions agreed that they wouldn’t nominate anyone in order to pave way for dissolution. But the Yelk faction nominated incumbent Nikol Pashinyan in a technical maneuver because the Constitution says that a “vote” must take place.

Pashinyan took office after massive protests in April forced president-turned PM Serzh Sargsyan to resign. But Sargsyan’s Republican Party (HHK) still has most seats in parliament. Since taking office, PM Nikol Pashinyan has numerously said that the incumbent parliament doesn’t represent the people and that early elections should take place as soon as possible.

Below is an excerpt from Article 149 of the Constitution of Armenia on Election and Appointment of the Prime Minister:

“In case the Prime Minister submits a resignation or in other cases of the office of the Prime Minister becoming vacant, the factions of the National Assembly shall be entitled to nominate candidates for Prime Minister within a period of seven days after accepting the resignation of the Government. The National Assembly shall elect the Prime Minister by majority of votes of the total number of Deputies [Members of Parliament].

In case Prime Minister is not elected, a new election of Prime Minister shall be held seven days after voting, wherein the candidates for Prime Minister nominated by at least one third of the total number of Deputies shall be entitled to participate. In case Prime Minister is not elected by majority of votes of the total number of Deputies, the National Assembly shall be dissolved by virtue of law”.

Edited and translated by Stepan Kocharyan

RFE/RL Report 

Jailed Armenian General Offers Land To State

October 26, 2018

Naira Bulghadarian

Manvel Grigorian, a retired Armenian army general arrested in June on corruption charges, has offered to donate vast land holdings to the state, it emerged on Friday.

Grigorian’s lawyer, Levon Baghdasarian, said the 330-hectare plot owned by him is part of a beaver fur farm located in a village about 40 kilometers west of Yerevan.

“Real estate experts estimate its minimum market value at about $10 million,” Baghdasarian told RFE/RL’s Armenian  service (Azatutyun.am).

Baghdasarian claimed that the offer extended to the Armenian government is a gesture of good which is not aimed at pleasing the public or ensuring his lenient treatment by the authorities. He argued that his client continues to deny the grave accusations levelled against him.

Grigorian was arrested when security forces raided his properties in and around the town of Echmiadzin on June 16. They found many weapons, ammunition, 

medication and field rations for soldiers provided by the Armenian Defense Ministry.

They also discovered canned food and several vehicles donated by Armenians at one of Grigorian’s mansions. A widely publicized official video of the raids caused shock and indignation in the country.

The Armenian parliament, of which Grigorian is a member, was quick to allow investigators to keep him under arrest him on charges of illegal arms possession and embezzlement. The once powerful general denies the accusations.

Grigorian’s lawyers have repeatedly demanded his release from pre-trial custody, saying that the 61-year-old is suffering from a number of serious illnesses. Armenian law-enforcement bodies and courts have ignored those demands so far. It remains unclear when he will go on trial.

Grigorian served as Armenia’s deputy defense minister from 2000-2008. Until his arrest he was also the chairman of the Yerkrapah Union of Karabakh war 

veterans, an organization which was particularly influential in the 1990s and the early 2000s. He was reelected to the parliament last year on the ticket of 

then President Serzh Sarkisian’s Republican Party.

BNE IntelliNews

Oct 27 2018

US uber-hawk Bolton presses Armenia on Iran sanctions

Uber-hawk White House national security advisor John Bolton took on the tricky issue of what strangling the Iranian economy could mean to Iran’s poor neighbour Armenia when speaking to journalists on October 25 during his visit to Yerevan.

However, from his reported remarks, it is not clear what stance Washington seriously expects small, impoverished Armenia to take towards continuing business with Iran during the US sanctions assault on the Islamic Republic. That's a particularly difficult question because Armenia—enduring an “unsplendid isolation”—has greatly constrained trade options. It does not have diplomatic relations with neighbours Azerbaijan and Turkey and, with Moscow as its watchful strategic ally, it has to be careful in relations with neighbouring Georgia, which still has tense relations with Russia over breakaway territories.

Bolton vowed that President Donald Trump's administration would "squeeze Iran" with maximum economic pressure in response to Tehran's "malign" behaviour in the Middle East and around the world, when interviewed by RFE/RL after he had met Armenian Acting Prime Minister Nikol Pashinian.

"As I explained to the prime minister, we want to put maximum pressure on Iran because it has not given up the pursuit of nuclear weapons," Bolton told the media outlet’s Armenian service. "It remains the world’s central banker of international terrorism. And we’re concerned about its ballistic-missile programmes and its active conventional military operations in Syria and Iraq and elsewhere."

Bolton reportedly insisted that Washington did not want to "cause damage to our friends in the process" of expanding sanctions against Iran, which shares a border with Armenia, a country of 2.9mn that badly needs to boost trade and investment with the Iranian market of 80mn.

He was also cited as saying that that's why he "stressed" to Pashinian, in advance, that the Trump administration is "going to enforce these sanctions very vigorously" and that the Armenian-Iranian border is "going to be a significant issue".

Supporting peace in Nagorno-Karabakh

Prior to arriving in Armenia, Bolton held talks with Azerbaijan's President Ilham Aliyev and Foreign Minister Elmar Mammadyarov in Baku. At a news briefing after those discussions, he pledged that Washington would continue to support a peaceful resolution to the conflict between Baku and Yerevan over the breakaway Nagorno-Karabakh region.

Bolton further told RFE/RL that he and Pashinian "talked a lot, obviously, about Nagorno-Karabakh," and that he is aware of the economic difficulties Armenia faces as a result of the "geographical situation and historical antecedents" related to the conflict.

In solidarity with Baku over Nagorno-Karabakh, over which the Armenians and Azerbaijanis fought a war from 1988 to 1994, Turkey has, like Azerbaijan, also closed its border with Armenia.

Demonstrating the building economic relationship between Armenia and Iran, the Iranians in mid-October announced the two countries are to jointly build an oil refinery by the border between its Aras Free Zone (AFZ) and Armenia’s Meghri Free Economic Zone (MFEZ).

In a reference to how Armenia could be left with only Georgia as a neighbouring trading partner if it refused to trade with Iran, Bolton also reportedly said that those "current circumstances highlight" the importance of Armenia and Azerbaijan "finding a mutually satisfactory agreement to the Nagorno-Karabakh issue", adding: "Once that happened, then the Armenian-Azerbaijani border would open. The Turkish border, I believe, would almost certainly open. And I think the border with Georgia might be less subject to concern about what pressure the Russians may be putting them under."

Exploring US weapons sales to Yerevan

Bolton, meanwhile, has informed Armenia that the Trump administration wants to explore possible weapons sales to Yerevan that would not violate US Congress restrictions on such sales to Azerbaijan and Armenia because of the status of the Nagorno-Karabakh conflict. The conflict is largely frozen but there have been sporadic outbreaks of hostilities over recent years. Baku is watching Pashinian’s policy on the region closely, given that he is expected to win a landslide triumph in a general election to be scheduled in Armenia for some time before mid-December.

Writing on his Facebook page on October 25, Pashinian said his talks with Bolton were held in “an extremely positive atmosphere”.

"I think there is a real opportunity to bring Armenia-U.S. relations to a new level. And we are ready to take advantage of this opportunity," Pashinian wrote.

Armenia has to tread carefully when it comes to strengthening relations with the US, the EU and Nato. Former activist and opposition MP Pashinian came to office after leading a “people power” revolution in the spring and he is waging a battle against cronyism, corruption, business monopolies and politicians of the dislodged establishment whom he claims are guilty of historical human rights abuses. It is not yet clear whether Russia, which maintains military bases in Armenia, is content with the direction he is leading the country in.

Aysor, Armenia

Oct 27 2018

You are ruining what was built for decades: Ex DM to Pashinyan

Former defense minister Vigen Sargsyan has referred in an extended Facebook post to the foreign policy by Armenia’s acting Prime Minister Nikol Pashinyan and its outcome describing “new Armenia’s” foreign policy as “boring or more right to say unpleasant film.”

“I am writing this on the background of Pashinyan’s American fiasco which became clear after the visit of the U.S. President’s Assistant on National Security Affairs Bolton to Armenia. For the first time the Armenian-

American official dialogue was aimed not at clarification of mutual interests and approaches but informing about the interests of one side to the other. An impression was as if Bolton was not U.S. President’s advisor but the Armenian PM’s  and came to hint what should be done and what should not,” Sargsyan wrote, saying that it is not clear why this time unlike in Moscow the PM failed to voice the principal of not interfering into affairs of one another.

Making conclusions on Bolton’s visit, former DM wrote.

“- Armenia must get rid of its “historic clichés”. Turkey? I think yes.

- At the upcoming elections the PM needs high vote to be able to make decisions in Karabakh conflict settlement not favorable for Armenia.

Bolton reiterated not only Azerbaijan’s claim that Armenia is to be blamed for own blockage but justified the closing of the border by Turkey and its justification – Turkey’s policy of supporting  Azerbaijan in Karabakh issue.

- Armenia should not expect new assistance and direct investments from USA.

- Armenia must finally become independent. Bolton’s remark relates to Armenia’s strategic ally – Russia.

- The USA does not deny that it sold and may continue selling weaponry to Azerbaijan and if Armenia wants it can also buy U.S. weapons instead of Russian.

- In Iranian issue Armenia does not have alternative but fully apply U.S. sanctions. A statement on compressing the ring over Iran was made from the territory of Armenia – Iran’s neighbor and friend country.

In diplomacy not only the content is very important by the time and the place the statements are being voiced. Till now Armenia’s partners were sensitive while making statements about Armenia’s neighbors and friends in the Armenian territory or at the meetings with Armenian officials. Who or what untied them in “new Armenia”." 

“I do not know what was spoken behind closed doors but if the above mentioned was the open part the rest may be guessed and one may get terrified. Terrified of how in six months the state which had balanced foreign policy, which was respected, trusted and the position of which was considered, turned into a country while speaking about which foreign diplomats and officials do not even stop for a minute to think about its [Armenia’s interests],” he wrote.

Referring to the comparison of American and Russian weapons, Sargsyan stressed that even international experts do not subordinate the Russian weaponry to American, and Armenia as a CSTO member state has by now received it with available loan programs or as an assistance and has all the necessary technical base and specialists for its preservation.

“Bolton understands all very clearly. His statement was not a proposal to Armenia to buy American weapon but justification of selling it to Azerbaijan,” he wrote, adding that having a big experience and huge stores of spare parts of American weaponry, Turkey will help Azerbaijan in the issue.

Referring to the sanctions against Iran, the ex DM said there are not the first ones in USA-Iran relations, and Armenia has always tried to find the medium which allowed to maintain the demands of the international right but at the same time carry out important joint programs with Iran.

“The U.S. partners have always treated our vital interests with understanding and never threatened us with “complicated Iranian border”. As a result of the visit we learned that Armenia may soon be involved in the anti-Iranian policy which is a threat not only for Armenia but the whole region as well,” Sargsyan stressed.

Referring to Armenian Genocide issue, Sargsyan wrote that the American administrations have always been greedy in appropriate assessment of the Armenian genocide but they have always felt constrained of it. “Sometimes they urged Armenia to continue efforts for restoring relations and always highly appreciated efforts of the Armenian authorities in doing it. But instead of calling on Turkey to come into terms with its own history like Obama did so in Ankara, now the USA called on Armenia to “get rid of historical clichés” which is rather new and undesirable approach in the U.S. policy,” Sargsyan wrote, expressing hope that the U.S.-Armenian community will respond to it.

“So which is the main message stemming from Armenia’s interests during Bolton’s visit. Ask PM Pashinyan. I have not found anything at least in the public part of the visit,” Sargsyan wrote.

He also warned Pashinyan not to put the blame of the failure on the specialists of the sphere who are neither revolutionary not counter-revolutionary but continue serving their homeland.  

“In serious issues it would be right to listen to their opinions and not the adventurers who were closing the streets, building barricades, dividing people into blacks and whites and dizzied from sharp carrier rise. The mistakes in this sphere are hardly restorable and may become fatal,” he wrote stressing that being the main responsible for the foreign policy the acting PM is ruining all that was created for decades. “If you fail to correct the situation as soon as possible, if you do not guide the situation the possibilities of professionals will continue limiting like during the past six months. Of course it is good that you are trying to be available for the people. But the ministers, ambassadors, advisors are also people. You should sometimes receive and listen to them as well,” he wrote.

Public Radio of Armenia

Oct 26 2018

Armenia’s President attends Prince Charles’ birthday celebration

At the invitation of the British Royal Family, Armenia’s President Armen Sarkissian participated in the celebration of Prince Charles’ 70thbirth anniversary, President’s Press Office reports.

Armen Sarkissian has long served as Armenia’s Ambassador to the United Kingdom of Great Britain and Northern Ireland.

News.am, Armenia

Oct 27 2018

Croatia defeats Armenia 3-0 

The Croatian squad defeat Armenians 3-0 during the first leg of the UEFA European Under-17 Championship.

Armenia will face clashes with Italian and Andorran squads.

AsiaNews, Italy

Oct 26 2018

Msgr. Barsamian: Armenian Church always close to its people

by Bernardo Cervellera

An interview with the representative of the Armenian Apostolic Church to the Holy See to mark the visit of Karekine II to Pope Francis. A theological dialogue between increasingly closer Churches. Pastoral collaboration in America and other regions. The history of a Church that has determined national identity, even under the genocides of Turkey and the USSR. Lack of clergy one of the most burning issues.

In order to support and strengthen the relations of friendship between the Vatican and Etchmiadzin, the seat of the Armenian Patriarchate, Msgr. Khajag Barsamian will remain in Italy. The archbishop, 67, former primate of the Armenian Apostolic Church in America, is now a representative of the Armenian Apostolic Church to the Holy See and a legate of the Armenian Church in Western Europe. Throughout Italy there are about 7 thousand Armenian faithful, scattered between Milan, Rome, Bologna, Venice, Florence.

AsiaNews met Msgr. Barsamian, who granted the following interview.

 

 Excellency, can you share any progress in the relationship between you, the Catholic Church and the Orthodox Churches?

From the theological point of view, we have dialogue and in them we discuss issues such as the Eucharist, ordination, the sacraments. There are no substantial differences. One of the most obvious differences is obviously that on the primacy of the Pope as head of the Church. Which must be studied and understood. Pope Francis, when he came to Armenia, declared that "unity is where one is no higher than the other".

In terms of theological discussions, we note that there are no great differences. Sometimes there are differences in the family of Eastern Orthodox Churches, but they are not an obstacle to our unity. In the same way, in history some Catholic theologians considered the Armenian Church as monophysite, but when studying the Armenian texts of the fifth century, hymns, we see how the two natures of Christ were accepted among the Armenians: human and divine.

From a pastoral point of view, for example in the United States, there is a strong dialogue between Catholics and Orientals. I was the president of the Armenian Church in America, and we had good relations in pastoral care. In case of marriage, if the couple were Catholic and the ritual took place in a Catholic church, we would accept to participate in the Catholic sacraments.

Let's talk about Armenia: what is the relationship between the Church and its people?

The Armenian Church is a Church of the people, therefore a national Church. Not nationalistic, but national. Faith is part of the Armenian identity, as when in the fifth century, the Persian King Sassanid wanted to force the Armenians to deny their Christian faith and embrace Zoroastrianism, General Vardan [Mamikonan] replied: "Faith is part of our skin, we cannot change it ". And they fought, became martyrs but did not give up. Also in the fifth century, there is the so-called Golden Age, when the monks created the Armenian alphabet .... Our culture, architecture, music and everything else is based on Christ.

Faith is part of the Armenian identity, so in case of a vacuum in reign or political leadership, the Church is the driving force. For example, during the period of the diaspora in the United States, Armenian Christians remained such thanks to the Church. In every parish there is a room where there are cultural programs, catechism classes, meetings for young people, where faith is taught, but also identity.

Did all this endure even during the genocide?

We lost a lot during the genocide. Before the genocide there were 6 thousand Armenian priests around the world. During the [Turkish] genocide, 4 thousand of them were massacred. Then communism arrived in Armenia, which killed about 2 thousand priests. This created a void: 98% of spiritual leadership was destroyed. And it must be said that the Communists did worse than the Turks because the Turks only killed the body, but the communists also destroyed the spirit.

Let me give you an example from my own experience. I was born in Anatolia, in the central part of Turkey. My grandmother was three months pregnant when one night they came and took her husband and all the men. When my father was born, there were no churches. But he used to say: "My mother was a mother and a father". I was born in Arapkir, where there was no church: all seven had been destroyed, but my brother and I learned to pray from my grandmother. The Church was at home. So when we moved to Istanbul, it was very natural for us to start going to church right away. I am a priest thanks to my grandmother, because the spirit [of Christianity] was there.

The communists not only destroyed the churches and annihilated the clergy: they taught atheism in schools against the Church, faith, Christ. In every [scholastic] curriculum faith was set aside.

And when Armenia chose independence from the USSR in 1991?

When we gained independence, Armenia was in turmoil. It was a moment full of challenges, and once again at the forefront, the Church offered great support. In our diocese, we immediately created a fund to support the Armenians and I personally signed an agreement with the US government for aid of up to 10 million dollars. I spoke to the State Department and I said that the Armenians needed help.

At present the Armenian aid fund has donated $ 315 million for development projects in the medical, agricultural, educational and other areas. The Church has offered its support to orphans, children, etc. And this from a single diocese, the American diocese, but certainly others also contributed.

There are still several challenges. The first is that in all the world the Armenian clergy is made up of only 815 members. This number is not enough, so new seminaries have been opened in Armenia. His Holiness the Katolikos is placing great emphasis on this aspect, and is sending many young priests to study at universities, especially Catholic ones, particularly in Rome, Paris, Europe and the United States. Some of these priests have already returned and have now become professors in the seminaries. In this way the younger generations are prepared.

Another challenge is on Christian education: this is why the Katolikos signed an agreement with the government to teach the history of the Armenian Church in public schools. On the recommendation of the European Union, religion cannot be taught at school, but history can be taught. Thus the new generations can learn something about the Armenian Church. Religious texts are written by the Etchmiadzin, as well as teachers for these courses.

The Etchmiadzin has also created youth organizations, television programs that talk about catechesis, films, various programs to communicate  the faith to people.

What is the current economic situation in the country?

The main problem is that the borders are still closed with Turkey and Azerbaijan. Instead, those with Georgia and Iran are open. Armenia tries to maintain a good balance in relations with the West, the European Union and the United States, but also with Moscow, because the situation imposes it.

I myself tried to create dialogue with Turkey because I believe that opening borders could improve the economy. There were many more possibilities during the presidency of Abdullah Gül; now with Erdogan it is different. When the Holy Father Francis visited Armenia in 2016, I suggested to Card. Pietro Parolin that the Pope could also go to Turkey, crossing the border between our two countries. But the Turks did not agree to this. With closed borders, there are not many opportunities for free markets. In any case, I believe that something good is happening in Turkey: there is a development in small steps.

In Armenia, months ago there was a change of government, demonstrations by young people: These are all good signs. This means that the previous government - with all the problems it had - was able to give the new generations the freedom to start thinking freely. This is positive, and it is not automatic. For example, this is not happening in Azerbaijan.

What are the main evangelization challenges for the Armenian Church?

One of the main challenges, once again, concerns people: young people now have an open mind, but the elderly have a Soviet mentality. The Church is experiencing this process: during the Soviet domination, the clergy did not have permission to evangelise, to go out and announce as Jesus told us to. They waited for people to come for baptism, confirmations and all the rest. But now there are new developments: clergy go out, the go out to meet people, and people know that priests can go to them. It is beginning to happen, but it takes time to become customary.

Collaboration between priests and laity is also important. For example, in my American diocese, religious and lay collaborate together to carry out the mission at the diocesan and outside level, in assemblies, in parish councils. Even the laity are involved, it is not the priests who do everything. This process is also taking place in Armenia and His Holiness Karekine II is pushing a lot for this.

Another challenge is the lack of clergy. In every city, community or village there is a need for a pastor, a priest who can take care of people's spiritual needs. For example, in the United States, 85% of priests' time is spent on pastoral care: visits, assistance, organization, celebrations, liturgy. And also for the remaining 15%, the needs are pastoral. This is another necessity and reflects the vision of His Holiness the Katolikos. But it takes time. For their part, the laity also help in the administration of the dioceses.

Finally, there are programs for the care of orphans, hospitals, meetings to advise how the Church can help people start a business, even small businesses.

From the point of view of ecumenism and interreligious dialogue, I must say that in our country there are Kurdish and Muslim villages that are very free. Then there are Russian, Georgian, Syrian villages and even a Jewish community with the Synagogue. There are no problems of any kind. Also in Yerevan there is an ancient mosque, which has recently been restored, I believe by the Iranians.

Business Monitor Online

October 26, 2018 Friday

Armenian Growth To Slow But Remain Above Recent Averages

Following stellar growth in 2017, economic activity will moderate in the years ahead. Growth will nevertheless remain above recent historical averages, as higher commodity prices and solid investment support growth. An expected improvement in the political outlook will benefit longer-term growth potential. 

Key View 

Following stellar growth in 2017, economic activity will moderate in the years ahead. Growth will nevertheless remain above recent historical averages, as higher commodity prices and solid investment support growth. An expected improvement in the political outlook will benefit longer-term growth potential. Having come in at a five-year high in 2017, real GDP growth will moderate over the coming years but remain above recent averages. 

Real GDP growth came in at 7.5% in 2017, with this solid pace continuing in the first half of 2018. Economic growth was recorded at 7.2% year-on-year (y-o-y) in the second quarter of 2018, having come in at 9.6% y-o-y in Q118. The economy grew rapidly in H118 due to surging investment and healthy household spending. Reflecting this, Armenia's statistics agency estimates that growth in the first half of 2018 was around 8.4% y-o-y. While higher commodity prices and solid investment will continue to provide tailwinds, there are signs that growth, despite remaining robust, has begun to slow somewhat in H218 - a trend we expect to continue over the coming years. In line with this, we forecast real GDP growth to come in at 4.5% and 4.0% in 2019 and 2020 respectively, from an expected 5.8% in 2018. Growth Will Moderate... We expect economic growth to moderate over the coming years, in large part as Russia's recent economic recovery runs out of steam. The Armenian economy is highly reliant on the Russian economy, namely as it's largest market for exports and as a source of workers' remittance inflows. While we estimate Russian real GDP growth to come in at a five-year high of 1.9% in 2018, which concomitantly has been a major driver of recent high growth in Armenia, we expect this to mark a peak in the country's economic recovery. In line with this, we forecast Russian real GDP to lose steam over the coming years, which will also drag on near-term growth in Armenia.

The Armenian government's ongoing commitment to fiscal consolidation will also result in economic growth slowing in the years ahead. The government is in the process of creating a fiscal framework that will aim to deliver sustainable fiscal consolidation and debt reduction. Indeed, this has already had a notable impact on the budget deficit, which shrank from 5.5% of GDP in 2016 to 4.8% of GDP in 2017, and we forecast the deficit to continue shrinking over the coming years. Specifically, the focus of the government's fiscal consolidation will be on current expenditure, which will weigh on private consumption. Highlighting this, plans announced by the government in September to raise pensions by 60% from January 2019 appear to have now been cancelled. According to the draft 2019 budget, no increases to salaries or pensions are now expected.Finally, although we expect an eventual improvement in the political outlook, in the immediate term political uncertainty will remain elevated in line with the protests that occurred in mid-2018 and an upcoming snap election expected in December 2018. We expect this to somewhat dampen near-term growth (for an overview of the current political situation see 'Armenian Snap Election To See Pashinyan Government', October 25). ...But Remain Around Recent Averages 

Despite losing steam, we expect Armenia'seconomic growth in the years ahead to remain above recent averages - the 5-year average comes in at 4.0% - and broadly in line with its regional peers. This is largely due to higher commodity prices, in particular copper prices, given Armenia's reliance on mining-related industries for growth. Our Commodities Team expects a persistent under-supply to keep copper prices on an upward trajectory, averaging USD7,300/tonne by 2020 from a spot level of around USD6,000/tonne. At the same time, this should encourage higher capital expenditure and inward investment. Alongside recovering commodity prices, favourable credit conditions will be also be supportive of fixed investment over the coming years. A more benign inflation environment and improvements across Armenia's banking sector have allowed market-based interest rates to fall, which should encourage further corporate borrowing.

Improving Political Outlook To Benefit Growth Potential 

While political uncertainty is likely to remain high over the coming months, for the reasons outlined above, we are ultimately expecting an improvement in the political outlook. We would expect this to benefit longer-term growth potential. Following the upcoming general election, we expect Nikol Pashinyan, the current prime minister, and his 'My Step' alliance to remain in government, with a majority in parliament also looking likely. Under this scenario, we would expect the new government to focus on structural reforms. In particular, we predict a focus on policies that improve governance, the business environment and encourage the development of the private sector .